What happens to your pension when you die? (UK, 2026)

30 July 2026 · Inherit Vault

Here's the thing almost nobody knows about pensions: your will doesn't control them. Defined-contribution pension pots pass outside your estate, at the discretion of the scheme's trustees, guided by an "expression of wish" form you probably filled in on your first day at a job years ago, and haven't thought about since.

Who actually gets your pension

For workplace and personal pension pots, the provider's trustees decide the beneficiary, taking your nomination form as strong (but not binding) guidance. That discretion is why pensions historically escaped inheritance tax, and why an out-of-date form matters so much. There are people whose pensions went toward an ex-spouse nominated twenty years earlier, ahead of their current family, because nobody updated one piece of paper.

Death in service, final-salary schemes, and the State Pension each have their own rules, lump sums, dependants' pensions, and (for the State Pension) generally nothing beyond specific inherited entitlements for spouses. Every scheme differs; the only universal rule is that the scheme must be asked.

The tax picture is changing

Under long-standing rules, dying before 75 usually meant beneficiaries drew the pot tax-free; after 75, at their own income-tax rate. Reforms announced for April 2027 are set to bring unused pension pots inside the inheritance-tax net, a major shift that makes it even more important that your family actually knows every pot exists and gets proper advice at the time.

The quiet scandal: unclaimed pots

The average UK career now spans eleven employers, each potentially leaving a pot behind. The Pensions Policy Institute has put lost pensions in the tens of billions of pounds. A pension is only paid to your family if someone tells the scheme you've died, providers don't reliably find out on their own, and a paperless pot with a dead email address can sit unclaimed indefinitely. The Pension Tracing Service can help find schemes, but it needs employer names to start from, which is exactly the information that dies with you.

The two-line fix

Keep a list of every pension provider and policy number you've ever accumulated, and check your expression-of-wish forms are current whenever life changes, marriage, divorce, children. That list belongs somewhere private, current, and guaranteed to reach your executor: which is precisely what Inherit Vault is, an encrypted vault for the complete map of your financial life, released to your verified executor and unlocked with the Recovery Certificate you leave with your will. Eleven employers, eleven pots, zero of them lost.

Leave your family a map, not a mystery.

Inherit Vault is the UK's digital inheritance vault: every account, policy, and instruction your family will need, encrypted so only you can read it, released to your executor when it genuinely matters.

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What happens to your pension when you die? (UK, 2026)

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